Derksen et al. v. 539938 Ontario Ltd. et al., (2001) 153 O.A.C. 310 (SCC)

• Judge: L'Heureux-Dubé, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel, JJ.
• Court: Supreme Court (Canada)
• Case Date: April 25, 2001
• Jurisdiction: Canada (Federal)
• Citations: (2001), 153 O.A.C. 310 (SCC);2001 SCC 72

Derksen v. 539938 Ont. Ltd. (2001), 153 O.A.C. 310 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2001] O.A.C. TBEd. OC.032

539938 Ontario Limited, Roy's Electric, Roy Zub, Douglas Zub and Joyce Zub (appellants) v. Tyler Derksen, a minor, by his litigation guardian William Derksen, and Travis Derksen, a minor, by his litigation guardian William Derksen and the said William Derksen, and Kathy Derksen, and William Derksen (Sr.), and Justina Derksen and Fred Irvine and Edith Irvine (respondents) and 539938 Ontario Limited, Roy's Electric, Roy Zub, Douglas Zub, and Joyce Zub (with respect to Wawanesa Automobile Policy Number 3556895) (respondents) and 539938 Ontario Limited, Roy's Electric, Roy Zub, Douglas Zub and Joyce Zub (in their uninsured capacity) (respondents)

(27524; 2001 SCC 72)

Indexed As: Derksen et al. v. 539938 Ontario Ltd. et al.

Supreme Court of Canada

L'Heureux-Dubé, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel, JJ.

October 19, 2001.

Summary:

Roy's Electric (the contractor) entered into a contract with Bell Canada for the placement of certain underground cables upon lands adjacent to Highway 11. Zub was an employee and shareholder of the contractor. On December 5, 1995, Zub closed the construction area early due to bad weather. In cleaning up the site for the day, he placed a steel plate 20 inches square and one inch thick onto a compressor unit in the back of the supply truck. While Zub was driving, the plate, which was unsecured, flew from its position and crashed through the right front window of a school bus. It killed one person and seriously injured three others. A lawsuit was commenced. At issue was the extent of coverage three insurance policies owned and maintained by the contractor provided to the plaintiffs, given the provisions of the respective policies and the Insurance Act limitations. These policies included: (i) an automobile policy: limits $1,000,000; (ii) commercial general liability policy: limits $1,000,000; and (iii) umbrella liability policy: limits $4,000,000.

The Ontario Court (General Division), in a decision reported 75 O.T.C. 133, determined accordingly the scope of each policy and its application to the plaintiffs' claim. The comprehensive general liability insurer appealed the decision.

The Ontario Court of Appeal, in a decision reported 123 O.A.C. 232, dismissed the appeal. The comprehensive general liability insurer appealed.

The Supreme Court of Canada dismissed the appeal.

Insurance - Topic 6582

Multi-peril property insurance - Contractor's or builder's policies - Extent of coverage - Zub was an employee and shareholder of Roy's Electric, a contractor - While cleaning up a construction site for the contractor, Zub placed a large steel plate onto a compressor unit in the back of the supply truck - While Zub was driving, the unsecured plate flew from its position and crashed through a school bus window - It killed one person and injured three others - At issue was the extent of coverage the contractor's commercial general liability (CGL) policy provided - Particularly, the policy excluded coverage for bodily injury or property damage arising out of "the ownership, use or operation" of an automobile and for bodily injury or property damage with respect to which any motor vehicle policy was in effect (the contractor also had automobile insurance) The contractor et al. argued that the accident resulted from a single auto-related cause, which fell within the exclusion - Alternatively, if there were two concurrent causes, the CGL policy did not afford coverage because one of the causes was auto-related - The Supreme Court of Canada disagreed - The accident was not caused solely by the "use or operation" of an automobile - There was concurrent work-site negligence - Because there were two possible causes, the policy applied, but only to that portion of the loss attributable to non-auto-related negligence - See paragraphs 1 to 64.

Insurance - Topic 6593

Multi-peril property insurance - Contractor's or builder's policies - Exclusions - Automobiles - [See Insurance - Topic 6582 ].

Insurance - Topic 6863

Liability insurance - Business - Comprehensive policy - Extent of coverage - [See Insurance - Topic 6582 ].

Insurance - Topic 6918

Liability insurance - Business - Comprehensive policy - Exclusions - Automobile operation - [See Insurance - Topic 6582 ].

Cases Noticed:

Law Union and Rock Insurance Co. v. Moore's Taxi Ltd., [1960] S.C.R. 80, refd to. [para. 32].

Wu v. Malamas (1985), 21 D.L.R.(4th) 468 (B.C.C.A.), refd to. [para. 32].

Walker Estate et al. v. York Finch General Hospital et al., [2001] 1 S.C.R. 647; 268 N.R. 68; 145 O.A.C. 302, refd to. [para. 34].

C.C.R. Fishing Ltd. and Bank of Montreal v. British Reserve Insurance Co. et al., [1990] 1 S.C.R. 814; 109 N.R. 1, refd to. [para. 36].

Ford Motor Co. of Canada Ltd. v. Prudential Assurance Co., [1959] S.C.R. 539, dist. [para. 39].

Dominion Bridge Co. v. Toronto General Insurance Co., [1963] S.C.R. 362, dist. [para. 41].

Charterhouse Properties Ltd. et al. v. Laurentian Pacific Insurance Co., [1993] I.L.R. 1-2937; 22 B.C.A.C. 62; 38 W.A.C. 62 (C.A.), refd to. [para. 42].

Lizotte v. Traders General Insurance Co., [1986] I.L.R. 1-2076 (B.C.C.A.), refd to. [para. 42].

Clark's Chick Hatchery Ltd. v. Commonwealth Insurance Co. (1982), 40 N.B.R.(2d) 87; 105 A.P.R. 87 (C.A.), refd to. [para. 42].

Goodman v. Royal Insurance Co. of Canada, [1997] 8 W.W.R. 69; 118 Man.R.(2d) 20; 149 W.A.C. 20 (C.A.), refd to. [para. 42].

Wayne Tank and Pump Co. v. Employers' Liability Assurance Corp., [1973] 3 All E.R. 825 (C.A.), not folld. [para. 43].

Pavlovic et al. v. Economical Mutual Insurance Co. (1994), 52 B.C.A.C. 98; 86 W.A.C. 98; 28 C.C.L.I.(2d) 314 (C.A.), refd to. [para. 47].

Reid Crowther & Partners Ltd. v. Simcoe & Erie General Insurance Co., [1993] 1 S.C.R. 252; 147 N.R. 44; 83 Man.R.(2d) 81; 36 W.A.C. 81; 13 C.C.L.I.(2d) 161, refd to. [para. 49].

Amos v. Insurance Corp. of British Columbia, [1995] 3 S.C.R. 405; 186 N.R. 150; 63 B.C.A.C. 1; 104 W.A.C. 1; [1995] 9 W.W.R. 305; 127 D.L.R.(4th) 618; 10 B.C.L.R.(3d) 1; 13 M.V.R.(3d) 302; 31 C.C.L.I.(2d) 1; I.L.R. 1-3232, refd to. [para. 51].

Statutes Noticed:

Insurance Act, R.S.O. 1990, c. I-8, sect. 267.1(1), sect. 267.1(2), sect. 267.1(6) [para. 13].

Authors and Works Noticed:

Fleming, John G., The Law of Torts (9th Ed. 1998), p. 247 [para. 33].

Counsel:

Steve Stieber and Heleni Maroudas, for the appellants;

Kristopher H. Knutsen, Q.C., and Wesley Derksen, for the respondents, Tyler Derksen et al.;

Earl A. Cherniak, Q.C., S. Alexander Zaitzeff and Kirk F. Stevens, for the respondents, 539938 Ontario Ltd., Roy's Electric, Roy Zub, Douglas Zub and Joyce Zub (with respect to Wawanesa Automobile Policy Number 3556895);

Lawrence G. Phillips, for the respondents, 539938 Ontario Ltd., Roy's Electric, Roy Zub, Douglas Zub and Joyce Zub (in their uninsured capacity).

Solicitors of Record:

Stieber Berlach Gibbs, Toronto, Ontario, for the appellants;

Carrell & Partners, Thunder Bay, Ontario, for the respondents, Tyler Derksen et al.;

Lerner & Associates, Toronto, Ontario, for the respondents, 539938 Ontario Ltd., Roy's Electric, Roy Zub, Douglas Zub and Joyce Zub (with respect to Wawanesa Automobile Policy Number 3556895);

Lawrence G. Phillips, Fort Frances, Ontario, for the respondents, 539938 Ontario Ltd., Roy's Electric, Roy Zub, Douglas Zub and Joyce Zub (in their uninsured capacity).

This appeal was heard on April 25, 2001, before L'Heureux-Dubé, Iacobucci, Major, Bastarache, Binnie, Arbour and LeBel, JJ., of the Supreme Court of Canada. Major, J., delivered the judgment of the court in both official languages on October 19, 2001.